The OMO policy is part of CBN’s financial engineering tactics to ensure that deposit money banks channel credit to the real sector, to reduce crowding-out of the private sector in the area of credit.“Banks should lend money to the real sector to enhance economic growth and development. Banks are currently awash with liquidity and this should be channelled to the real sector.” Ezeagu said. With real gross domestic product (GDP) growth at 2.10, 2.12 and 2.38 percent in Q1, Q2 and Q3 2019, respectively, and population growth at 2.6 percent, Nigeria’s economy is struggling to find its bearing.“The sluggish economic growth is further compounded by its debt burden, infrastructure deficit, acute security challenges with concomitant effects on lives and properties as well as food production. Yet, the economy dictates the tune for the capital market,” Ezeagu ended.

Source: The Guardian January 28, 2020 03:56 UTC